The Market Is Telling You Something
Your stop-loss renewal came in higher than last year. Maybe a lot higher. Before you blame your broker or your carrier, understand what's happening above them.
The reinsurance market is hardening. Carriers are passing costs down. And employers are absorbing rate increases that industry veterans are calling the biggest in recent memory. The data backs it up.
The stop-loss market has grown fast, from $35.4 billion in annual premiums in 2025 to over $40 billion today. More employers self-funding means more risk in the pool. More risk means more claims, and more claims mean higher rates.
What's Actually Driving the Increases
Loss ratios are the clearest signal. According to BenefitSmith, industry-wide loss ratios have climbed to 85%, well above the historical target of 75%. Carriers are calling it unsustainable and expecting a 3 to 5 year correction cycle.
That correction costs you money every renewal.
Three things are pushing claims higher right now. First, claim frequency. Voya Financial's Stop Loss Insurance Paid Claims Analysis shows incidence climbing to 32.5, up from 23.8 in the prior period. That's a 37% jump.
More employees are hitting specific deductibles. Cancer claims alone make up the largest share of both claim count and total cost.
Second, GLP-1 drugs. Ozempic and Wegovy are showing up in employer claims at a scale that wasn't modeled into most carrier pricing two years ago. A single employee on a GLP-1 for obesity can run $15,000 to $20,000 annually. Multiply that across even a mid-size workforce and the exposure adds up fast.
Third, gene therapy. A single approved gene therapy can cost $2 million or more per patient. Carriers didn't price adequately for these treatments when they were experimental. They're not experimental anymore.
Reinsurers Are Feeling It Too
Stop-loss carriers buy their own protection from global reinsurers. When that market tightens, the cost flows downstream to you.
According to Atlas Magazine's Global Reinsurance Market analysis, global reinsurers' shareholders' equity grew 11% in 2024, reaching $1.177 trillion. That sounds healthy. But US reinsurers' equity has grown 160% over ten years, outpacing premium growth.
That gap signals selective capacity, not open capacity. Reinsurers are being choosy about the risk they take on, and health-related stop-loss is getting scrutinized harder.
BenefitSmith also notes carriers are reinsuring themselves at a higher rate than prior years, which signals concern about risk volatility. Employers with clean experience gain negotiating power. Employers with one or two large claimants face steep pressure with limited options.
What You Can Actually Negotiate
You're not powerless here. But you need the right information going into renewal.
A few things worth pushing on:
- Laser limits. Carriers can exclude or limit specific known claimants. Understand exactly what's on your laser list and at what dollar threshold before you sign anything.
- Specific deductible levels. Average specific deductibles have held relatively flat across most group sizes. If your carrier is pushing the deductible up alongside the premium, that's a double hit you should price out separately.
- Multi-year rate caps. In a hardening market, locking a cap on future increases has real value. Some carriers will negotiate this for employers with good experience.
- Aggregate accommodation. If your aggregate corridor is wide, ask if it can be tightened. This is often a negotiable line that brokers don't push on.
For context on exposure, Voya's claims data projects roughly $4.6 million in high-cost claims exposure for a self-funded employer with 3,000 employees. Knowing your expected exposure helps you evaluate whether your specific deductible is set at the right level or just the cheapest one your broker quoted.
If your renewal is coming in 15% to 20% higher and your advisor can't explain exactly why, that's a problem. The data exists. The explanation should too.